Market speculators hold net long position of soybean futures as trade optimism grows

Source: Xinhua| 2019-10-19 10:50:24|Editor: xuxin
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WASHINGTON, Oct. 18 (Xinhua) -- Data from U.S. Commodity Futures Trading Commission on Friday showed that market speculators held a net long position of soybean futures this week as China and the United States have achieved substantial progress in the latest round of economic and trade consultations.

Non-commercial investors, commonly treated as market speculators, held a net long position of 81,798 soybean futures contracts for the week ending Tuesday. Commercial traders, commonly treated as hedgers, held a net short position of 87,843 contracts.

In the latest round of U.S.-China economic and trade consultations held in Washington D.C. on Oct. 10-11, the two countries achieved substantial progress in areas including agriculture, intellectual property rights protection, exchange rates, financial services, expansion of trade, technology transfers and mechanisms for dispute settlement.

The progress has brought more optimism to the U.S. agricultural sector and financial market.

Speculators and hedgers are different types of investors. Speculators try to make a profit from the assets' price volatility, whereas hedgers attempt to reduce or "hedge" the amount of risk created by price volatility during the holding period of the assets.

When investors "short" some kind of financial asset like currencies or commodities, they hold a bearish view on the asset and believe its price will decrease.

The soybean futures, traded on the Chicago Board of Trade, are derivative financial contracts that obligate the parties to transact an underlying asset at a predetermined future date and price. The underlying asset of each contract includes 5,000 bushels of soybeans.